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2015 Financial Goal Update

January 4th, 2016 at 08:14 am

About a year ago I set a financial goal for the 2015 year. My goal was to gave a 250K net worth by the end of the year. I missed that. By a long shot.

My net worth a year ago was $227,074. My net worth today is $227,948. An $874 increase.

Of course the stock market is tanking, that's a big factor.

I've also taken on more debt - to renovate that barn that I was talking about last time I was actively blogging, and braces for DD1, that I blogged about in April/May.

Also, when we were lining up the barn loan, our house was appraised. It wasn't fully appraised. We got what is called a BPO - Broker's Price Opinion. That's a drive-by appraisal.

I had our house listed on my balance sheet at 85K, and the BPO came back at 80K. Who knows, if the broker had walked through the house, he might have been closer to an 85K number, but to "official" number was 80K, so I changed my balance sheet to match that, so that's a 5K difference.

I wish I had recorded and saved what my retirement fund balance was a year ago. I have no idea, but I know it is less than it was a few months ago.

I suppose it only makes sense to set my 2016 goal back at 250K for 2016. We'll see how I do this year.

February net worth update, tax income and braces.

February 16th, 2015 at 08:53 am

I know it's mid month. Actually a bit past mid month, but I just figured my February net worth - it's $229,440, a $2,366 increase over last month.

We filed our taxes this weekend, and I can't remember our refund amounts, but it's around $3,000 federal, and $1,000 state. We still have that federal adoption credit working in our favor, but I'll plan on adjusting withholdings.

DW is still working on that freelance project. She hopes to have it finished by the end of the month. Once she's finished, she can bill for another $5,600.

It looks as if DD1 needs braces. That would be a $5,000 bill. If she gets them, we would probably time it so that she got them right after DW has received her freelance income.

Our dentist has fairly strongly recommended that she get braces. It's his opinion that teeth will touch each other, and cause future cavities. We took her to see an orthodontists, and oddly, he wasn't as strong in his recommendation for braces. He seems to think it would be more for cosmetic reasons. So, I'm not sure what we'll do.

We can easily wait for the freelance income, but there are lots of places for that money to go. We can get on a no interest 18 month payment plan. If we pay up front, we'll receive about a $200 discount.

DW had braces as a child, I did not, but my sister did. My teeth are a little crooked, and I could have had some cosmetic benefit from braces (I think). And it's clear to even me that DD2 will need braces after more of her permanent teeth have come in.

So, again, I'm not sure what we'll do, but we probably won't make any decisions until April or May.

Does anyone have kids who were on the borderline of needing braces? What did you decide?

What is the value of my name?

January 23rd, 2015 at 06:55 am

We bought a new-to-us vehicle last month. A 2012 minivan with a bit more than 3,000 miles. So, it's still under the manufacturer's warranty.

We bought it for a good deal. In fact, our lender has informed us that we paid about $1,000 less than the National Automobile Dealers Association (NADA) value.

For the past three weeks or so, every third day or so we've been receiving cheesy form letters in the mail telling us that our manufacturer's warranty is about to expire! We had better act fast, and purchase their extended warranty!

It's apparent to me that this dealer has sold our name to these cheesy companies. It makes me wonder just how much our dealer sold our name and address for.

It's a little bit annoying, but also a little bit funny. It's also sad, because there would be no value to selling our name if the tactic didn't work on a certain number of people.

It would be tempting to add that to the negotiation next time we buy a vehicle - "I'll pay $XX,XXX for this car with the understanding that you won't sell my name to any cheesy companies", for example. Not so much because of the burden of getting these mailings, but more of a "I know what you're going to do" type of a thing.

And I guess, if we were able to buy the van for less than NADA because our name was sold, then so be it. It's not a really big deal. I am sad that it apparently works on so many people, though.

Retirement Projection

March 24th, 2014 at 12:34 pm

Anyone who has been following my blog for most of the past three years knows that I spend a lot of time putting together financial projections of all sorts. That includes my retirement, even though it's 20 plus years away.

I've got a retirement tab on my master spreadsheet. It includes an accumulation phase, where I estimate how savings will grow, and a depletion phase where I estimate how well that fund will stand up under various scenarios.

I've struggled for some time deciding what kind of number to plug in for Social Security payments, and to a lesser extent when to plug in a beginning age for collecting SS.

Until recently, I've used a 15K number (annual), and begin drawing at age 72. I thought of those numbers as low-ball estimates.

I know that there is a prevailing attitude among many in the SA community (particularly people younger than about 45) that they are making retirement plans assuming that there will be no SS 25 or 30 years from now, and that they will consider any SS payments to be gravy in their retirement.

While they may be right - there may be no SS 25 or 30 years from now - I'm betting that there will be SS in some form, reduced from where it is now. I just don't know what I can expect for a reasonable guess as to what that amount will be. I don't think anyone younger than 50 does either. The law is clearly subject to (and expected to) change.

So, I set to come up with a more reasonable, and still conservative number to plug in to my spreadsheet. I did some very quick "research" on the internet, and found a site that quoted that SS trust fund reserves would be exhausted by 2033 (oddly enough, a few years prior to my own retirement), and after that tax income would be sufficient to pay about three-quarters of scheduled benefits through 2087.

I also went to the Social Security web site, and found my current projected monthly payments at ages 62, 67, and 70.

I took the number projected at age 67, multiplied it by 0.75, and plugged it into my spread sheet, starting at age 70.

It turns out that I wasn't that far off with my previous estimate. My new number is $2,000 greater per year, and I'm starting the payment two years earlier in my projection now.

Certainly every single number in that projection is subject to a great deal of change. What I really want is a target retirement fund figure to shoot for. That number will change. However, I think my estimate now is a bit more refined than it was a few days ago.

I'll continue to go in and adjust things from time to time. Hopefully in another 15 years, I can have a very solid plan for retiring 5-10 years after that.

If anyone is interested, this is the page that I quoted above: http://www.thenewamerican.com/economy/commentary/item/16497-the-future-of-social-security

Savings Deposits Made

September 13th, 2013 at 03:08 am

We've transferred some money to four different savings accounts:

$1,000 to each of our girl's savings accounts for college. We'll send that money to their 529's at some point in the future.

$5,200 to our emergency fund. EF total is now $6,000. It's nice to have a "real" EF now.

$400 to a sub account under regular checking. Plans are to transfer $400 to this account each month from here on out. That will be an account for non-monthly/non-regular expenses like property taxes, vehicle repairs, garbage (quarterly), Christmas and birthday gifts, and house maintenance.

Our Septic System

August 16th, 2013 at 06:02 am

No, our septic system didn't fail. But, it hasn't been updated in quite some time, and will need to be replaced. Just, not yet.

But, we want to be prepared, and have the money available for replacement, when the time comes. So, I called an installer yesterday, to get an idea of replacement cost.

His first questions were: which county do you live in, and how many bedrooms are in your house? I told him which county I live in, and that we have three bedrooms in our house. My county requires a 2,500 gallon tank for a three bedroom house.

Next, he asked me if our house was on sand or clay soil. I told him that our soil was loamy, or in-between. The required length of the tiles in the drain field are dictated how fast your soil percolates water. Sandy soil percs faster than clay soil. So, a septic system on sandy ground costs less than a septic system on clay ground (less excavation, less fill sand, less drain tile).

He estimated the cost at about $6,000, but said that the estimate would be much tighter after the county environmental health department came out to do an actual perc test.

So, we'll set aside $6,000 in the EF. The system may need to be replaced next year, or it may be 10 or more years. Either way, we'd like to be prepared.

529 Plans

January 11th, 2013 at 06:32 am

We deposited some money into our girl's 529 college savings plans. We opened a 529 for each of our girls when they were born. They both have pathetic balances.

The money we deposited this month was money that each of them have earned through their 4-H livestock projects. We deposited $1,900 into DD1's account, and $200 into DD2's account. DD1 has been showing and selling 4-H animals for three years, and this was DD2's first year.

Once we get the CC problem taken care of, college savings is yet another financial reality we will have to face. In 8 short years, DD1 will be ready. Ouch.

Decision on TV

September 6th, 2012 at 05:53 am

Last month I posted that we were considering getting satellite TV again. We've made our decision - we're not getting it.

While the monthly cost was a factor, that wasn't the main driver. The primary reason is our kids. They don't need it. The crap that's marketed to them via TV. The crap that's on TV. Our kids aren't even bugging us to get TV. So, why would we?

Clearly, we're saving money by not getting satellite again. That's great. And I miss some aspects of TV. But, we just don't need it.


August 6th, 2012 at 06:45 am

We cancelled our TV satellite service about two years ago. We cancelled it because we could no longer afford to pay a monthly TV bill and reduce debt.

We're in a much better financial state than we were two years ago. We can now afford to pay a monthly TV bill, and continue to make substantial steps toward reducing debt. The question is - should we?

We have found life without TV to be not only acceptable, but in many ways preferable. The kids no longer fight about what's on the TV. The TV is not constantly on, rotting our brains. We have an extra $60 per month to allocate somewhere else. Most of what's on TV is crap anyway.

We are missing the Olympics. And I miss the Big 10 network and NCAA tournament coverage most of all (Go MSU!). And sometimes, if used properly, it can give you a parenting break. (The same old DVDs get tiring after a while).

So, we're considering whether or not we should re-up with our satellite TV service. And, getting the cheapest, most basic service is not appealing to me Like I said, the Big 10 network is part of the deal.

What do you all think?

Adoption Credit

August 2nd, 2012 at 10:53 am


I've been inactive for quite some time, but I wanted to let you all know that our 13K federal adoption tax credit arrived in the mail this week, with interest. We deposited it, and the check cleared yesterday. Today we paid bills! $2,500 went to pay off our new front porch, $2,000 went to one of the credit cards, $5,000 paid off our van, $2,200 went to family members for Mort 2, and the rest went to our EF. Sure feels good!

Some of you may be tempted to critique how the money was spent. Please don't. (ie, more should have gone toward high interest credit cards) This was a balance of my wishes, DW's wishes, and sending money to family members with whom we have loans. Trust me, I know that paying off higher interest accounts makes more purely financial sense, but we feel an obligation to accelerate progress on family loans.

My vehicle situation will change

March 9th, 2012 at 05:36 am

I drive a 1994 Chevy Lumina. It has 143,000 miles. Nearly all the miles I put on the car are back and forth to work - about 30 miles per day. The car has always been fairly reliable. But its days are certainly numbered.

I got a call out of the blue from my aunt yesterday. It seems that the Mazda that their son drives had a transmission blow out. This is the car that my aunt and uncle drove about 10-15 years ago. Their son has been driving it for about 5 years or so. Anyway, my aunt made the following proposal to me: They would put anew transmission in it, and simply give it to me. WOW! She also suggested that I take the Lumina off insurance and park it, as she cannot guarantee the reliability of the Mazda.

My uncle is meticulous about car care, and I know that this car has been well cared for. I don't feel as if I need the charity, but the deal is too good to turn down.

A new course?

February 27th, 2012 at 07:50 am

This is an interesting time for me financially. We were able to pay down quite a bit of debt with our tax refund. Now that we have our CC debt somewhat tamed, I've been using more of my mental energy on our mortgage debt, unsold house, etc.

I'm guessing most of you watched M*A*S*H. When the choppers came in with wounded soldiers, Hawkeye and Margaret would triage the patients. They took the terribly worst off ones first, and the really bad ones second. That's what my finances feel like. I concentrated on the high interest credit card debt first because it was killing us, and left the really bad mortgage debt for later. I feel as if it's later now, and we need to start addressing the mortgage debt, even ahead of the CC debt now.

I'm sure I've mentioned it before, but we have renters living in our house #1 now. They are interested in buying the house, so we agreed to rent to them for one year, take the houde off the market, and revisit in July.

Wheter or not they are the purchasers, we have to unload that house this summer.

So, I'm going to start hoarding cash ahead of paying off CC debt, so we can be in a better position to close on the house when the time comes. I'll still pay more than minimum payments, but not as much as the past 16 months.

I hope this is the right decision. If not, I'm sure someone will let me know.

Roof Waste

November 16th, 2011 at 06:03 am

I disposed of my roof waste last Friday. To start the story at the beginning, we called around for dumpster rental quotes, and found out that the minimum that we would have to pay was $250. That was more than we wanted to spend, so we decided to borrow my dad's trailer, and we had the roofers pile the waste onto it.

I hauled the trailer to the land fill, about 12 miles away, and the disposal fee was $19. I made two trips to the salvage yard, about 4 miles away. One trip was the scrap steel, and the second trp was the scrap aluminum. The steel brought $32, and the aluminum brought $20. Probably twenty percent plus or so of the scrap steel was other scrap we had laying around, so we'll say that the scrap steel from the roof was worth $25.

So: Cost for trash disposal - $19
Proceeds from steel - $25
Proceeds from aluminum - $20
Cost for travel (40 miles @ $.50 per mile) - $20

Net for waste disposal - $6.

Sure beats $250 for dumpster rental.

But, if we had rented the dumpster, there is some other trash laying around the place that we would have disposed of. I guess I need to make another $19 trip to the landfill!

Roof Savings

August 31st, 2011 at 05:51 am

I get paid once a month, on the last day of the month. So, today is pay day! Indeed, my favorite day of the month. The direct deposit happens at 12:00 midnight, so I wake up on the morning of the last day of the month with a nice surprise in my checking account.

I've blogged before about how we've been saving for a roof. The strategy I've taken for roof savings is to take whatever is left at the end of the month, and transfer that into our savings account. Just moments ago, I transferred $429.84 into savings. We now have $4,620.26 in our roof savings account. "Just" $2,879.74 left to go.

The walnut tree

August 11th, 2011 at 05:44 am

We have a black walnut tree behind our house. It drops walnuts on our house, and they tend to be very loud. Also, the tree has grown enough that the branches are now scraping against the roof, and that is annoying. My wife has let me know that it is time to take action.

So, I borrowed my dad's chain saw yesterday, and brought it home. With chain saw in hand I looked at the tree, and I looked at the house. I looked at the tree, and then the house again, and quiclky came to the realization that the likelihood that I would damage the house if i cut even a branch off the tree was probably 80%.

It would probably cost at least $300 to hire a professional tree company to take care of the problem. So I opted for an interim solution - hire the Amish guy who lives down the road. Yes, I have an amish guy that lives down the road. Actually there are three Amish families that live within a mile of my house. This particular Amish guy cuts down trees, and cuts lumber for a living.

The problem is ... he will most likely refuse payment. Which would be fine if I had an in-kind service to return to him. Amish tend to be fairly self sufficient. I'll try to offer him $75 or something like that, but if (when) he refuses, I'll be indebted to him. I'll try to come up with something in return, but I don't know what it will be.

Sorry ... I can't help it

August 10th, 2011 at 08:23 am

I keep looking at my retiremt fund balance. Once per day. As you know, it's like looking at a yo-yo, that doesn't seem to return back to the hand each time it's dropped.

I know that there are crazy weird things happening right now, and today's balance will have little in common with the balance 6 months or 6 years from now. But, it's kind of interesting to see what I hear on the news translated directly into my own retirement fund.

My CC Debt to Retirement Savings ratio ... again

August 9th, 2011 at 05:55 am

After yesterday's post, I found myself fixated with my debt to retirement fund calculation. I ran a projection. I assumed my monthly contributions to my retirement fund plus modest gains (thanks again, congress) plus my projected decrease in CC debt.

I project that by March 2012, my ratio should be 14.6%. Of the three factors I mentioned, (contributions, fund growth and CC reduction), I have control over two of them. My contributions are pretty much fixed at 15% of salary. I could increase contributions, but I probably will not. I have absolutely no control over the market. The one factor I can really work on is CC reduction.

Let's see if I can continue to whittle down on CC debt, and meet my short-range goal of a 14.6% CC debt to retirement fund ratio.

My CC Debt to Retiremt Savings Ratio

August 8th, 2011 at 05:43 am

This isn't a real financial benchmark ratio, as far as I know. But, 5 years ago, it was about 100%. In other words, I owed about as much on credit cards as I had saved toward my retirement - $30,000.

I calculated this ratio again, and it is now 20%, even with the pathetic performance of my retirement fund over the past several weeks (thanks, congress). Or, for every dollar I have saved towards retirement, I owe twenty cents in credit card debt.

Of course, my goal is to have that ratio down to zero.

Starting an EF

July 28th, 2011 at 05:31 am

Maybe some of you read my question in the forums yesterday. I'm starting an EF. We've gone almost three years without using credit cards. And, we've managed to operate without an EF. But, it's time to change that. So...We'll establish a $1,000 EF, and begin beefing it up when the cards are paid off.

We actually have some money saved up right now - $4,200. That's new roof savings. We figure the new roof at $7,500. Plus, we need to have $800 in reserve to pay back the security deposit to our renters if/when they move out. So, the savings goal will need to be $9,300 before we can buy the new roof - "just" $5,100 to go!