Financial Update -- May 2011

A little financial update for everyone since I just got around to moving some money here and there. 

Hubby got paid today (a bit early because of the holiday on Monday) so I decided to get the ball rolling on some transfers. 

Some of the money I already had set aside and the rest was added with this paycheck.

• Transferred $450.00 to our mortgage savings for 1/2 of the monthly mortgage payment (it's actually more than 1/2 our regular payment, but I like to have the account padded a little in case homeowner's insurance or property taxes go up)
• Transferred $501.07 to our credit card
• Transferred $240.82 to my college loan savings (loans not due until end of 2011/beginning of 2012, but starting to make "payments" to get a head start)
• Transferred $501.08 to our emergency fund
• Transferred $534.00 to our vacation savings (have to keep up with it if we want to go to Italy next year)
• Transferred $50.00 into my IRA (automatically deducted every month)

All of our bills are paid until the middle of June.  The emergency fund is almost back to the pre-layoff amount, which we'll finish next month.

Finally...

I have never been so happy to see a pay period get here!  OK...that's not exactly true because all pay periods are good...more money always helps!  But this time with DH's mistake I was really looking forward to this one.  

And there are NO BILLS due for these next 2 weeks!  I can really put some money aside for DH's tires and hopefully he'll be able to get them really soon!  I've already replaced all the money I've "borrowed" from the other accounts.  Plus the normal transfer of $442.60 into the savings account for our mortgage payment.  

Getting into the routine of transferring 1/2 the mortgage payment every two weeks into the savings account it automatically gets pulled from was a great idea!  The mortgage is the first thing I "pay" every pay period.  I have never made a late payment or missed a payment!  And I know the money is always in the account when it's time for it to come out.

I don't expect to have any problems paying my bills, but if I did I would pay my mortgage and heloc first because I would never want to lose my home.  Second, I would make the truck payment because DH needs to get to and from work (though if we were really that bad off we would probably sell the truck and get a cheap, reliable vehicle--unless it was already paid off).  Lastly, I would pay the credit card.  Of course mixed in all that would be buying food, prescriptions, and paying for utilities.  Those would also be before the credit card.  

Of course all of this really doesn't matter if you plan well.  That's why we have an emergency fund.  If DH loses his job we don't have to make decisions on what to pay and what to not pay.  

And someday our plan is to not ever worry about it at all!  Our plan to payoff all our debt including our mortgage is a long term one for now, but once I can go back to work that will turn into a short term plan.  

• Everything I make will go towards debt!  
• Anything over what we've been currently living on from DH's paycheck will go towards savings.  

Right now it's just send whatever we can to pay down or off our debt.  Living below our means definitely helps though we don't deny ourselves either.  I have 2 more years (Spring, Summer, and Fall terms) of college to complete my B.S. degree along with my double minor and 3 certificates.  Once that is done I'll volunteer for a few years to get my foot in the door of my new career and still be available for my youngest son, who will still be in elementary school.  I'll be able to get a job again when he gets into middle school (my oldest will be in high school by then).

I can't wait to see how fast the debt disappears once I'm working again!  I almost want to see about getting a job sooner because of it, but I know I have to concentrate on my schooling and children first. Though if the right opportunity came along that still allowed me to do all the things I do with my boys, then I would consider it.

Woohoo!

DH paid $2.799/gallon for gas this morning and I paid the same at a different station this afternoon!  Usually we've been paying up to $65.00 to fill up DH's truck and about $40.00 to fill up my car.  But today it was $44.50 and $27.02!  I am so happy!  I know it would be better if it went even lower, but for now this is exciting to me!

On another note...DH made a mistake and bought something using the debit card instead of using the credit card that I told him to use to replace a piece of important computer equipment that died on us.  It totally threw off my entire budget for these two weeks.  Especially since things were already tight because it was a 2-week period where it seems all the bills decided to be due.  In the next 2-week period coming up there are absolutely no bills due!  So I've had to borrow from our blow money "accounts" and will replace it when we get paid later this week.

Suze Orman on AC360

Last night Suze Orman was talking to Anderson Cooper on CNN.  Everyone has a different opinion on her.  Some people like her and some don't.  I'm more in the middle, but that could be said about any financial personality out there.  

But last night she made some very good points that I believe a lot of people forget.  Before I get started on them I just want everyone to know they can find the transcript for the show here.  You have to scroll down some--about halfway down the page to find the section with her, then Ari Velshi talks for a little bit and back to her again.

Here are some points:

• "If you need the money in one year to retire, to generate income for you, and it's all in growth stocks, yes, you betcha. You come out of the stock market right now." and "But, if you don't need the money for 10, 15, 20 years, and you're in good, quality stocks, stocks that aren't going to go away, then of course you stay here."  

Let's face it most of us are in it for the long haul.  You're 401K is there for the future and over time they end up growing.  The media reports make it sound like it is so bad that you're going to lose everything!  The big thing is to keep on contributing, don't put everything into one basket, and if it really makes you nervous--don't look at your account too often right now.  It can get really depressing if you do.  Be patient!  In my case, I try not to look at it because I know it's going down, but I have another 27 years until I really need it!

• "Look at your own lives. Look at what you have got going on. There's only one thing, Anderson, you have control over in this life. And that is your own personal finance, as what you do with the money you have, what you do with the money that you don't have.  Look at your own lives. Look at what you have got going on. There's only one thing, Anderson, you have control over in this life. And that is your own personal finance, as what you do with the money you have, what you do with the money that you don't have. And that's where you have to focus right now" 

Again I have to agree here.  How can the average person control what is going on outside of their own finances?  The average person cannot!  So the only thing anyone can do is take care of your own finances to make sure you can survive in a time like this.  You cannot worry about others (examples: government spending, stock market, bank closures and bankruptcies, etc) when you don't have your own finances in order.  Make sure your money is safe in FDIC insured accounts, pay off or down high interest credit cards and loans, have an emergency fund, know where your money is going and/or figure out where it should be going.

So how are you dealing with the current financial situation?  Do you watch it constantly and panic/get depressed?  Or are you patiently waiting for it to be over because you know you're in it for the long haul?  

I admit it can get pretty depressing always hearing about decreasing home values, decreasing home sales, increasing foreclosures, increasing bankruptcies, businesses going under or being bought out, stock market crashes, increasing gas and grocery prices, etc.  But the media also isn't talking about people that are making it in these "hard times", who were smart enough to not get themselves into a bind by paying off debt, not panicking, not buying more house than they could afford, etc.  I know that some really fell into trouble because of others or emergency situations, but we also have to be responsible for our own personal finances at some point.

2-Week Pay Period: July 31, 2008 and End of Month

It isn't often that both the end of a 2-week pay period and the end of the month coincide.  This was also the end of a 3-check month.

End of 2-Week:

• The first thing I decided to do is to redirect my extra 1/2 mortgage payment transfer amount of $442.60 to my new extra loan payoff savings.  I just don't really need it for the mortgage so I figure it'll do me more good paying off some debt.  So along with some additional funds I managed to move over there, I was able to make two additional payments on the truck loan.  So this month I've made payments for August, September, and October.  And I still have $90.03 left in the extra loan payoff savings.  When it reaches another payment, then I'll send it in as an additional payment.
  

• I paid $100 for my August credit card payment.  I only owed $19.00, but I'm used to paying extra.  Besides I've had to use it more often lately because of the boys' dentist appointments.  
  

• I scheduled our cell phone bill for August in the amount of $63.75 (that's for two phones).
  

• I paid $99.91 on a doctor's bill for what was left after copay and insurance.
• I transferred the blow money for my husband and me; and the allowance for the boys.
  

End of Month:

• Groceries: $213.59
• Dining out: $184.31
• Husband's Work Lunches: $138.10 (can you tell bringing his lunch to work isn't working?)
• Gas: $570.21 (it's going down!)
• Prescriptions: $8.20
• Dental: $313.70

All our bills are now paid through the next pay period due on August 14th.  I may still need to update some of the numbers in the sidebar later because:

1. the mortgage payment hasn't gone through yet and I like to see the exact loan amount remaining after the payment.
2. interest in the savings accounts are not showing yet.
3. I always check the truck loan after the checks have cleared as the total amount due is usually lower (I tend to overestimate the interest and underestimate the principal).

I believe that about covers this last 2-weeks and last month.  Let's hope August is a good one!

Does More Income Actually Mean More Money?

I want to thank Fabulously Broke In The City for giving me something to talk about on these slow three days (personal finance wise anyways).  She wrote a post on July 4th entitled High Income doesn't necessarily mean Financial Smarts that set off a topic I like to talk about--basically people that have a lot of income (or what should be a lot of income), but still don't have any money and lots of debt.

One point that wasn't brought up was that income and how much is high really depends on where you live.  Other factors such as whether you are single or married, or have children or not could also determine what is considered a low or high income to someone.

For instance my husband's salary would barely pay the mortgage/rent if we lived up north.  Because we live in the south and have stayed out of the larger cities, then his income allows us to pay the bills plus some and I can stay home with the children now.  Five to ten years ago we were only making in the $25K-$35K range and managed to build two houses (not at the same time) and have two kids (again not at the same time).  My husband was able to stay home for a while during that time period to take care of our youngest son who was born with a birth defect and needed extra care, and go to school.  Now with DH working post-degree (and his student loans paid off early) we are making in the $50K range, living more comfortably, and I get to go back to school.  Imagine what we'll be able to save and pay off when we are both working!

At the same time I've known people that make more than we do, but still don't have a life as comfortable as ours.  Oh on the surface it looks comfortable!  One job layoff though and it'll be all over...no more house, no more cars, debts sent to collections, trying to figure out how to pay for food.  Yeah that could be bad!  

I don't believe that income has anything to do with whether you can pay off your debt and live comfortably or not.  Yes, more income does make it easier, but the real key is living below your means.  I'm pretty sure I've mentioned how we live below our means here.  Has it always been easy?  No, and more income would have been nice, but we managed and we still do.  

I do believe that there are people out there that try very hard, budget their money well, and due to situations out of their control still don't have enough to make it.  Just living below your means and budgeting doesn't always cut it for everyone.  But I think there are also a lot of people out there that would benefit if they would just live below their means and budget and the amount of income really wouldn't have anything to do with it.

2-Week Pay Period: July 3, 2008

I'm a little behind due to some school work (I'm happy to say I received a 96% on my test yesterday) and I still have more to do (another test today and two papers due Monday).  So let's see if we can make this a bit quick today.

Because of the holiday (Happy Independence Day!) my husband got paid a day early!  YAY!  That helped out tremendously because I was in real need of groceries with the boys home for the summer eating everything!

This is what I did:

• Transferred $442.60 into savings account for 1/2 mortgage payment
• Transferred remaining $43.00 ($8.60 each) into 5 virtual savings accounts (set up in my Quicken program): Auto Purchase, Christmas, Home Improvement, Investment Property, Vacation.
• Transferred the boys' allowances ($6 and $2) and our blow money ($25 each) into virtual accounts.
• Transferred $100.00 into virtual Auto Insurance savings account to prepare for January payment.
• Paid bills due prior to next payday: $100 to credit card (already set up), $62.53 to cell phones (already set up), $14.93 to medical bill, $300 to heloc payment (interest and principal).
• Got my husband's medicine refill: $5.48
• Bought $111.17 worth of groceries.

We now have about $467.00 left to last until the next payday on July 17th.  That's not bad considering we won't be going anywhere today or this weekend.  I estimate over the next two weeks my husband will spend about $195 in gas and about $56 in food.  I expect he'll actually spend less.  This leaves us with $216.00 for any other incidentals that may pop up over the next two weeks.

ENFJ--Idealist Teacher Personality

I'm going a bit off the topic here today, though I guess if you really think about it you could interpret my personality into how I would handle money.

I had to take this test for my Personality Theories class.  It is a shorter version of the Myers-Briggs test based on Carl Jung and his theories.  I've taken it before, but thought this was an interesting test to put out there.

My personality came out as ENFJ or Idealist Teacher Personality (Extraverted--22%, Intuitive--25%, Feeling--25%, and Judging--44%).  While it seems I would be more Introverted than Extraverted, and I do have many Introverted characteristics, I tend to crave getting out and around people after being at home too long.

I enjoy being organized yet at the same time my desk never stays neat.  I clean it and then somehow I always end up with papers all over the place.  But my finances are neat and organized.  I plan things meticulously.  I'm constantly making lists.  My checkbook, stamps, address labels, payment coupon books are all in one organized place.  My bills are set up on Quicken so I never miss a payment date.  Yet I can barely find a pad of paper on my desk if I need to make a note.

Overall the test was pretty accurate with its description and the career choices for my personality match the areas I'm currently studying.

What is your personality?  How do you feel it reflects with how you deal with your personal finances?