Monday 124: Reflections on 2016

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Monday, 20 February 2017

While our finances do not look like this – geometrically increasing – our finances do reflect this curve as far as overall net worth.  As our bills decrease, our net worth increases, even though we have taken on more debt.  This latter is frustrating, but we signed up for the program when we sent The Student off for undergraduate work.  The same when we bought the car.  The car was the result of several months of increasingly expensive car repairs on the Subaru and spending about two months looking for an affordable replacement and not finding one.  Looking back a year, I can see we could have done things differently.

So, while not completely happy with what we have done, I think it wouldn’t hurt to step back and look what we have accomplished since January 2016, which is when we started working on our debt snowball.  These are “guestimates” based on simple multiplication and a quick look at historical balances.  Some adjustments have been made for assumed interest payments, knowing what our rates are.

  • House:  $42,500
  • Car:  $3,110
  • Credit Cards:  $10,000
  • Student Loans:  $4,000

The total we paid off is $59,610.  That’s more than the average American makes in a year, based on government statistics.

Should I feel good or bad about this?  I don’t think that is important.  More important is what do we do – can we do – not should we do – and what are we going to do?

Decisions

So, in discussing various aspects, we are considering cashing out some stock to drop the snowball further.  We are already in an obnoxious income tax bracket and live in a high-tax state, but in discussing this with our accountant, he says that pulling money for the snowball will increase our taxes, but in doing so, we can up the 401K contributions to offset this, as well as increasing our withholding from the checks.  I need to do some math, but to me, that is a good solution.  We would pay off the one credit card that has a 20.49% interest rate.

We are also not using Amazon or any credit cards, unless we need to for security purposes.  Then the cash is moved immediately to the credit card.  The result is that our “Amazon” card has a positive balance (meaning it’s not maxed out by our little fingers) and when the next monthly payment comes along, it will be dropping, and our snowball will be better funded.  That is a big change.

We changed our mobile bill service plan to one that gives us what we need / want, but costs less.

We will increase our savings rate by sweeping all extra cash into our savings account at the end of the month.  This means every month, every penny will have a job, not just a roll-over into the next month.  I want more money in the bank in cash this year, not just debt reduction and increased retirement savings and matching.  I want to meet emergencies and needs more successfully this year.  We are currently working at saving $1000 / month, but also are using it to fund big purchases, taxes, and vacations.  That really is too little considering all we are using it for.  The kicker is how to balance pay-off of debt with the need for cash – that is the hard decision, and one which will most likely be tweaked as we progress through this year.

Altogether, I see a lot of positives from one year of debt reduction.  We feel more sane.  Nice!

Monday 125: Tax Season Reflections – A Year in Review

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Monday, 13 February 2017

Nothing like looking at what you made in money, and what you have to show for it.  The tax season doesn’t lie – unless you do, or your accountant does, or your employer.  My advice:  Don’t do it!

Frankly, I am appalled at how much money we make, and how much we owe.  A few years ago, our accountant said, “You should be living ‘the good life’ with your income.”  It sunk in.

We sold the rental, and in January of last year, we started the debt snowball.  

And then bought a car when the Subaru blew up one time too many.  We bought car payments.  And now we have student loan payments for The Student.  We are still up to our ears, but if all goes to plan, the credit cards will be paid off by May 2019.  It’s a hell of a lot of money, some at more than usurious rates.  And, that day seems like a long, long way off.  A part of me wants to cash out some stocks to bring down some debt, but with our income it may not be advisable – I am not sure what the line in the sand would be in percentage of taxes paid next year; we are already in a very high tax bracket.

We meet with our accountant this coming Friday.  I will talk to him about his thoughts on using stocks to pay down debt.  Being the type of person who doesn’t like financial surprises, we have been saving for potential taxes as well as known taxes.  There is money in the bank should we need it – more than there was this time last year.   The really cool thing is that as we slowly learn about finances – how to handle them, how to talk about them, how to plan for them – we are making progress that is of more value than the money itself.  To me, this is the biggest blessing of taking the plunge into the debt snowball.  We are not rigid – we have had to adapt – but right now, we can handle most emergencies!!  

A year ago, we could, sort of.  Rather than discuss things, we would argue about things.  Mr. 182 would sigh about the lack of money, but not think about how to save it.  He went along with the program and resented it, and while not obviously unhappy with it, a wrong word here or there, and resentments on both sides would flare.  While still not perfectly in tune with each other, we are more in coordination with our money.  The fact that money is now more of a topic of conversation off and on during the day, and a part of our conscious thinking, clears the way, and continues to clear the way, for productive usage of our money.

I am sure there are those who would tell me we should and could be doing a better job.  They are probably right.  We are working on doing better this year . . . no Amazon except as agreed upon, immediately paying for all items put on a credit card, cutting down of mobile phone costs, watching the food budget, funding the emergency and tax fund (we do not have an escrow account), and saving for known expenses.

We have paid off more than $10,000 in credit card debt while putting money in the bank, reducing everyday expenditures, and continuing to reduce other debt, even though we have added other bills.  The fact is some of our choices could possibly been different, but what we are doing now is working.  Changing 25 years of habits is work, but the change is occurring.

I could focus on what we aren’t doing, but prefer to see what we are accomplishing, have accomplished, and continue to accomplish as we change our financial habits.  It is this conscious awareness that helps us develop new strategies to cleaning up our past financial mistakes.

Monday 126: Final Thoughts on Uber Frugal Month

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Monday, 6 February 2017

The Frugalwoods’ Uber Frugal Month Challenge was a lot of focused energy on money, expenditures, finances, needs vs. wants, and so many different things that nothing can sum it up in a few words.  More than anything, it required an honest approach to write about it daily.  Now, almost a week after the event, it is interesting to see if all that work is paying off.

In a way it is paying off, and in another way, I can feel the lure of the Amazon button.  Now that the cat’s away . . . the mice want to play!  However!!  The mice need to remember the cat is waiting to pounce.  This is like losing weight, and then gaining it back.  Vigilance is needed, self-control, self-restraint, and more than anything, a weighing of the pros and cons of any action.  So, rather than worry about what we might do, let’s look at what we want to do.

“If you can afford to buy it, you can afford to save it.”  Thus speaks  Rockstar Finance.   This is the focus of February.  We can also add, “If you can afford to buy it, you must pay for it.”  This means anything and everything must be paid for out of the cash on hand.  Thus, if something comes from Amazon, it must immediately have its cost transferred from the checking account.  And this will include Audible, Netflix, and Kindle Unlimited.  This will start moving that credit card into a good place, even though it is a bit away on the debt snowball.

Sounds easy.  Let’s see if it is.

January expenditures actually decreased for the regular bills because we rigorously watched our spending on food, did not buy anything on Amazon, and got the mobile phone bill down about $80 / month.  The cash sweep at the end of the month added about $50.00 to the savings account.  February is a tight month, every year, as we meet with our accountant for annual federal and state taxes.  Mr. 182 got a pay raise and a bonus – very nice! – and it is set aside until we see what March and April bring us.  March means vehicle registration.  April requires payment of property tax and any other taxes owed.  The old cars need work, too.

So . . . we plod on, mindful of our goals, both short and long term.  Short term goals include monthly savings and paying off the debt snowball.  Long term goals are to maintain a more frugal and meaningful lifestyle that is not filled with debt and unnecessary things.

Cheap Thrills in Entertaining

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A couple of weeks ago we decided to have a bread-baking party.  It was our first one, but we knew from past experiences that a party surrounded by making food would be well received!  We have done pie-crust baking parties, and cake-baking parties (which turned into a surprise party for one member).  The results were tasty and included  Finnish Wheat Bread, sourdough with real sourdough starter, cinnamon rolls, challah, and strozzapreti (“strangled priest”) pasta.  Today, as further cheap thrills, and for a new experience, I decided to make some crackers.

Cheap is good!  Quality is better than boughten!  It usually is, if you know what you are doing, and if the effort – in your opinion – is worth it.  We enjoy bread here – especially Mr. 182.  We also like pasta, but have never made it before.  And the same with crackers.  If I were to weigh in on what is worth repeating, I would say the bread (always) and the pasta.  Crackers are a bit of work for what you get.  The crackers I made were a bit salty, and as I don’t care for salty food, that may be the reason why.  I plan to try to make them again, as with the pasta, just because the experiences are too new to really be something to judge as worthwhile or not.  A party to make them, though, is worth it, as everyone chips in and goes home with a lot of food for very little cost.  Community in action!

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Entertaining does not need to be expensive, and our bread-baking party was not.  Between all of us, we had yeast, flour, mixers, pans, seeds, pans, sugar, spices, nuts.  We decided that chipping in for a pizza would be smart, so for about $5.00 each we got pizza for five, and that included leftovers.  The results were we ended up with about five loaves of bread to keep, and enough pasta for two or three meals.

 

Monday 127: Reflections on a Month of Frugal Thoughts and Deeds

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Monday, 30 January 2017

Today marks the 30th day of Uber Frugal Month with the Frugalwoods.  It’s been thought-provoking, fun, and helped us take action in a few areas.  Overall, Mrs. Frugalwoods and I see eye-to-eye on many things.  She has also helped us look a bit more deeply into what we do and how we do it.

This month’s accomplishments and changes have been small and fun.

The first big change is reducing our cell phone bill from $275.00 / month to $194.00 / month.  We have been able to keep our unlimited data plans for 4 people, a few of whom travel overseas frequently.  Having the plan we have also allows unlimited international calling.  Our bill should drop another $38.00 in March or April when our phones are paid off.  That will be even better.

The second one was fun because we decided to stay within our $350.00 / month (whether 31 or 28 days) food budget.  To date, we have spent $349.98 and can wait until February 1st to spend on food!  Freezer foods help, as we do tend to cook a lot, and then freeze it for “lean” or lazy times.

Fixed monthly food costs for January are within the $350.00 limit, but in experiencing the last few days of the Uber Frugal Challenge, we are well aware of the fact we are out of fresh vegetables for salads.  Thus, we can spend $350.00 / month and be content, but that “month” is really a 4-week period, with an average of $87.50 per week a workable sum.  Therefore, that is a more realistic goal for us, as some months are longer, some are shorter, but the rhythm of shopping every Friday for staples, and then perhaps on Monday for fresh produce is the best choice for us.

The third is a major accomplishment:  we have not bought anything – anything!!! – on Amazon, except what we read on Kindle Unlimited!

And finally, we have cleaned out a lot of stuff in the past month!  Organized, discarded, donated.

But . . . the decision is still out about Netflix and Kindle Unlimited and Audible.  Monthly entertainment runs about $50.00 / month.

Of course, not all of this was smooth.  It takes a bit of creativity and adjustment to spending less, or deciding to stay within a budget.  In discussing food, we realize we don’t really miss meat that much – we eat less than before – but it’s also easy to fill up on quick carbs, like tortillas.  Our beef consumption is down, and our alternate sources of protein is up.  We eat a lot of eggs and beans.  Our refrigerator is nekked as I write, but there are things we can cobble together, and we are not wasting food.

Altogether, I don’t think we are in a bad space about how we are currently spending money.  It is the past which we deal with today.  We have student loans and credit cards and a car payment.  This is what kills us.  Additionally, we live in a high-cost area for housing, which doesn’t help either.  Our mortgage is high, but within the standard accepted rules for income / housing.  (I guess we got one thing right!)  Despite this, we continue to put $1000.00 into savings / month as a primary goal, and adjust our monthly budget around that.  This savings is used for property tax, emergency fund, and for any income tax at state and federal levels.  My income varies from month to month, and so we have to plan ahead much more than those who know exactly what to expect as far as income.  I’m pretty good at projecting, which helps.  Our debt is steadily being reduced using the snowball effect.

Work fills our days.  I work 4 days a week, and some days are nearly 11 hours long.  This makes personal time rare for a lot of the week.  Mr. 182 works full time, but as he is in IT, there are times when he works more . . . and then works less . . . but still gets the same amount on his check.  We each are funding our retirement funds, not at the maximum, but certainly where we get the match from our employers.  More income would help.  Working more is not something that would be good for either of us, in the traditional sense of being on someone else’s payroll in addition to our current employers.  Any side hustles would have to be at our own discretion.  I am looking at a few, but am not sure where they will end up.  It isn’t costing me anything except a bit of brain power and creativity and a willingness to try doing it.

In the big picture, we are content.  We see progress, we are more cohesive, and more creative.  The Uber Frugal Month with the Frugalwoods is paying off in many ways I did not expect.  I have been very focused on our finances, to the point where other areas of life fell by the wayside.  This rather frustrates me, but by the same token, doing anything requires this in order for change to occur.  The results have been a greater awareness to our finances and habits.  In February the creative energy put into our finances this month will continue, and they will be far easier as they are now more of a habit – or at least a new pattern – that is no longer uncharted territory.  This will leave creative forces to return to hobbies and new skills.

Little forays become big adventures into new and unknown territory, always with far greater results than ever imagined.

Recipe: Kitchen Sink Soup

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Toward the end of the month, and with $0.02 left in the food budget, we have to get creative.  I don’t think you can even buy a gumball for that price.  Yeah, we could go shopping, but the point of the Uber Frugal Month Challenge is to re-think frugality.  Hence, Kitchen Sink Soup!

During the week, Mr. 182 makes dinner for sure on Monday, Tuesday, and Thursday.  These are the nights I don’t get home until 7 p.m.  He likes to cook, and in all the time he has been doing this, he has only made one meal I didn’t like too much – it had boiled brussel sprouts, which are just gross.  When I have time, I like to cook, too.

Yesterday, in the spirit of uber-frugalling, I rummaged around the house and the internet to come up with a variation of minestrone soup.

In the freezer, I found a cut-up chicken. I put it in a stew pot, added water, celery, onion, tomato slices, bay leaves, peppercorns, a carrot, and some herbs. I brought it to a boil, turned it down to a low simmer, covered, and cooked the chicken. I pulled out the chicken, and set it aside for a pot pie or something else for tomorrow (after all the soup is gone). I ran the broth through a sieve, set it aside, discarded the cooked veggies (put them into your compost if you have it), and washed out the kettle. From there, I did this:

Kitchen Sink Soup

2-3 T. olive oil
1 andouille or other sausage or leftover meat (or none), chopped
4-6 cloves grated garlic
1 onion, diced
2 carrots, diced
2 ribs celery, diced,
1 zucchini, diced
1 28-oz can plum tomatoes (I used Cento’s San Marzano Plum Tomatoes)
1 15-oz can Great Northern Beans
1/2 c. pasta (I used orecchiette)
broth from the chicken I just stewed (you can use regular broth, about 6-8 cups)
salt, pepper, etc.
Romano or Parmesan cheese, grated

Heat stew pot, add olive oil. Place chopped onion in pan, saute over low heat until clear and golden. Add meat (if using) and saute a bit. Stir in grated garlic. Add remaining diced vegetables, saute until cooked. Once the vegetables are at the desired degree of being done, pour in the can of tomatoes. Mash up the tomatoes (I used my potato masher), and cook a bit more. Put in the chicken broth or whatever stock you are using. Bring to a boil, add pasta and beans. Drop to a simmer and cover pot. Watch to make sure the pot does not boil over from the cooking pasta. Check pasta for al dente. Ready to serve!

Ladle into bowls, sprinkle grated cheese on top, and eat with good bread. (We used our homemade sourdough.)

Enjoy!

Monday 128: Getting Our Feet Wet with Uber Frugaling

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Monday, 23 January 2017

Three weeks into the Uber Frugal Month, and eight days to go.  Who’d have thought that such focus could yield such results?  For us, it is, and will continue to be a good thing.  I am curious as to what others have accomplished – perhaps the Frugalwoods will publish some stories for us.

Anyway, what have we accomplished?  Here is a bit of a list:

  • We changed our phone plan to one which is less expensive than the one we had, still staying with T-Mobile
  • Being more focused on the cost of food and working very hard to stay within the monthly budget of $350, even with a bread-baking party last Saturday.
  • Keeping our fingers off the “buy” button on Amazon has been hard to do – but we are doing it!
  • Focusing on just one month has made us think about more than one month – looking ahead for a whole year, now.

The phone plan covers four people with unlimited data.  We have changed so it will now be about $100 less per month, in part because it will be debited rather than set up to send in a check to pay for it.  We share the cost of this plan with the in-laws, so they pay half of the current (and future costs).  Everyone will win here.

Food costs have been rather high for the last two months, with Thanksgiving and Christmas adding a bit.  This month is the perfect time to regain that focus on what are we doing with our food and our money.  It’s a game, too, knowing that I have the money to spend, but not doing so.

Keeping our fingers of the “buy” button at Amazon has required a bit of self control.  The result, though, is no purchases to date on Amazon, which is rather a shock!  It’s also a form of withdrawal.  The positive side is that the credit card bill will definitely drop.

Focusing on just one month has made us think about more than one month – looking ahead for a whole year, now.  This is really powerful.  For some time I have been thinking of doing a sweep of all leftover money at the end of the month and dumping it into savings.  Uber Frugal Month made me finally create an Excel spreadsheet to project potential savings for the next year by potential extra cash, based on the monthly income and budget needs.  It’s quite a surprise.  Even with property tax – but not income tax – along with an erratic income – we could save almost $13,000.00.  That’s a shock.  And a pleasant surprise.  If we do $11,000.00 I will be very happy as we do have money earmarked for a couple of weeks on the road in August.

I really wish I had known more about money, debt, savings, and investing a long time ago!  Uber Frugal Month is helping us look toward the future in a very new and refreshing way.