December 3, 2014

NOT Included In Our Net Worth...Darn It!

We have been blessed with good incomes for the past 8 years, breaking the $100K mark in household income in 2008 and working our way up to ~$250K in 2014. Our net worth has grown considerably as well. From $23K at the end of 2008 to nearly $300K at the end of 2014.

With that being said, I feel like we should have made better progress on our net worth, considering our incomes. I looked back at the last couple of years and determined that a considerable amount of money has been “invested” into our new home, but are not accounted for it in our net worth calculation. Some of the larger ticket items are:

$7,000 new HVAC
$1,200 new pool pump
$1,700 pool fence
$1,600 white picket fence in front yard
$1,800 security camera system
$1,500 refrigerator
$2,500 wash and dryer
$600 dishwasher

I use the purchase price of our home ($489K) for its value when calculating our net worth. If I included home appreciation, that would add another ~$150K based on comps in the area.  

I have no plans to begin accounting for improvements to the property or home appreciation but it does make me feel good to know that we bought at a great time and have invested in our home to make it safer, nicer, and if we sell one day, maybe more valuable.

How do you account for your home as an asset?


December 1, 2014

November 2014 Income Statement

November a very good income month and a larger than budgeted expense month (see spreadsheet below).

Our total income in November was $14,923.69. In addition to my wife’s paycheck, she received an $800 auto allowance and a $130 company reimbursement for internet service and FasTrak pass. The big news was that she also earned a quarterly bonus of $12,490 gross ($7,664.17 net). Such a blessing! We received a $96.79 home owner's insurance refund for removing our jewelry rider (another post, another time) and earned $5.60 in interest income from our online savings account. 

In November, we spent a total of $9,201.88. Some of our larger non-standard expenses were $597 for airline tickets, $373 urgent care bill for our son, and $1,100 in extra mortgage principal payments. If you subtract out our extra mortgage principal payments, our expenses were a slightly more reasonable $8,101.88.  Better than last month.

Next month should be a pretty typical income month. Obviously Christmas will bring additional expenses in the form of gifts and holiday travel, but hopefully not too much.


November 30, 2014

College Savings For Our Kids

We opened 529 Plans for both of our kids within a couple of months of their births.  We selected the Vanguard 529 Nevada Plan and invested in the Vanguard 500 Index Fund.  We choose Vanguard because we have Traditional IRA's and Roth IRA's with them and their expenses and fees are among the lowest in the industry.

The minimum initial investment was $3,000 and the minimum for additional contributions is $50.  Our son is 3 years old (Sept birthday) and has $11,020.92 in his account, while our daughter is 6 months old (May birthday) and has $3,457.07 in her account.  We encourage our families to contribute in lieu of birthday and Christmas presents, but have only been mildly successful at convincing them. 

In addition to the 529 Plans, we have a Upromise account that allows us to earn cash back for college on eligible purchases.   This is achieved by shopping shop online through upromise.com or registering credit/debit cards to your Upromise account and making purchases at participating restaurant, stores, gas stations, etc. You can register credit/debit cards of family and friends as well.

We haven't taken advantage of Upromise as much as we should, but have accrued $410.41 so far, of which $396.94 has already been automatically transferred into our son's Vanguard 529 Plan that we linked to Upromise.  Free college money is good!

November 29, 2014

Nanny Costs...$20,800/year

We have a nanny that watches our 3-years-old son and 6-month-old daughter during the day.  We pay her $80/day or $400/week.  That's $1,600/month for typical months and $2,000/month for longer, 5 week months.  Annually, we're paying $20,800 to our nanny.  Not a large income, but it's a huge sum of money for us.

I've seen a number of articles stating that daycare costs more than college.  I'm not sure about that, but it's pricey indeed.  We have reduced our nanny's schedule to three work days a week, for $240/week, while I am not working.  This arrangement gives me three days a week to focus on my job search, while saving us $640/month for typical months and $800/month for longer, 5 week months.

We choose to go with a nanny over daycare for a few reasons:
  • We love the personal attention that our kids receive
  • We can come home anytime to see our kids
  • Using our home security camera system, we can check on thing remotely
I dream of the day our kids begin public school.  The boost to our cash flow will be awesome.  Sure, there will be other expenses, but they will be small by comparison.  Technically, our son is already in school, but it is preschool and costs $297/month.  LOL!  Kids are expensive, but worth every penny.

November 28, 2014

Never Blacker November

I'm not a big "Black Friday" shopper, but I enjoy watching the news to see all of the craziness.

This year, Black Friday seemed to start more than a week early, based on all of the pre-Black Friday deals that I saw. On the news this morning a reporter commented on the lack of crowds at a local mall and how a large number of consumers are purchasing online. I think that is probably true, but I also think Black Friday is being watered down by "Grey Thursday", "Small Business Saturday", and "Cyber Monday". By the way, why isn't there a cleaver name for Sunday? Something like, "Super Black Sunday" or "Jet Black Sunday".

Anyways, as Black Friday spills over into the days around it, it seems likely that retailers will stretch this opportunity to sell over a longer and longer timeframe in the years to come. I could see the entire month of November becoming one big SALE. We could call it "Never Blacker November" and have discounts available the whole month. It's the perfect time to get deals for the upcoming Christmas holiday, purchase model year end vehicles, update your wardrobe for the New Year, etc.

I could also see some out of the box thinker taking it the other direction. Short "flash" sales that offer huge discounts but last just an hour, maybe even minutes. With smart phone technology, the time seems ripe for this type of thing. "Ultra Black Hour" could create a buying frenzy like non other.

November 27, 2014

November 2014 Net Worth Update (+7,220.55)

Happy Thanksgiving! November was a good month for our net worth. It increased $7,220.55 over last month, to a total of $293,750.08 (see table below).

What Worked
My wife earned a $12,490 gross ($7,664.17 net) quarterly bonus. We used this money to pay some of our 0% credit card balance down, deposited a bit into savings, and paid an additional $1,100 to our home mortgage. We contributed $617.20 to our retirement accounts in November and the total balance increased $4,577.35 to $138,021.77. I also moved my old company 401(k) balance ($68,291.73) to traditional IRA with Vanguard.

What Didn’t Work
We purchased a new (used) vehicle adding $26,000 in debt to our liabilities. Thankfully, they gave us $5,000 trade-in for our 2006 Honda Accord (120Kmiles) that was pretty beat up and needed ~$1,200 is work.

Next Month
December should be a pretty typical month. We plan to keep the Christmas presents affordable, but thoughtful.

Assets Oct-14 Nov-14 Change % Change
401(k) Accts       76,840.58         8,548.85     (68,291.73) -798.84%
Roth IRAs       10,891.89       11,322.39            430.50 3.80%
Traditional IRAs       45,711.95     118,150.53       72,438.58 61.31%
Taxable Brokerage Accts         1,148.00            898.53          (249.47) -27.76%
Cash & Savings Accts         7,814.70         9,152.70         1,338.00 14.62%
Son's 529 Plan / Upromise       10,576.31       11,034.39            458.08 4.15%
Daughter's 529 Plan / Upromise         3,313.44         3,457.07            143.63 4.15%
Home     489,000.00     489,000.00                    -   0.00%
Car 1                    -         30,000.00       30,000.00 100.00%
Car 2         8,610.33                    -         (8,610.33) 100.00%
Car 3       13,859.24       13,720.65          (138.59) -1.01%
Total Assets     667,766.44     695,285.11       27,518.67 3.96%
Liabilities Oct-14 Nov-14 Change % Change
Credit Card Balances         9,834.11         5,883.31       (3,950.80) -67.15%
Home Mortgage     371,402.80     369,651.72       (1,751.08) -0.47%
Car 1 Loan                    -         26,000.00       26,000.00 100.00%
Car 2 Loan                    -                      -                      -   0.00%
Car 3 Loan                    -                      -                      -   0.00%
Total Liabilities     381,236.91     401,535.03       20,298.12 5.06%
Net Worth     286,529.53     293,750.08         7,220.55 2.46%

November 26, 2014

Pedicure for a Man? Best $30 I've Spent.

I am confident enough in my masculinity to admit that I had my first pedicure today and it was AWESOME!   Easily the best $30 that I've spent in quite some time.

I walk around barefoot constantly and over the years have developed very callused feet.  A couple of years ago they started cracking and looking pretty bad.  My heels eventually developed deep, painful fissures.

I thought I could fix the problem myself.  I spent a good amount of money on countless PedEggs ($10 each), pumice stones ($5 each), foot files ($5-$10 each), lotions ($10-20 each), etc.  My wife even gave me a hydro-therapy foot massager.  None of it worked.

On multiple occasions, my wife suggested that I visit a nail salon to have the calluses removed.  Honestly, I was too embarrassed to go.  It's weird enough for a guy to go to a nail salon, let alone asking them to scrub your nasty feet.

Well, today I manned up and went to the local nail salon.  Initially, it was awkward.  I had a room full of women staring at me as I explained that my feet are gross and need attention.  One of the lady's receiving a pedicure shouted, "Your feet can't be any worse than mine were and look at them now".  I glanced down at her pink, soft feet and told the nail technician, "I want that."

I paid $30 ($25 + $5 tip) for a pedicure with callus remover and a sea salt scrub.  Not only did it feel great, but I had a blast hanging with the women in the salon.  I've always heard that women talk about some crazy stuff at nail salons and found out today that they weren't kidding.  Best of all, I am now the owner of two adorable, soft feet.

Guys, if you have nasty feet, do yourself a favor and visit a nail salon.  I wish I would have years ago.  I would have saved money and had better feet.  It's now going to be a monthly routine and the wife is coming with me next time.  Maybe we will get a mani/pedi...

November 24, 2014

Yep, We Bought the $30K SUV

As I indicated the other day, we have been considering purchasing a newer vehicle for my wife.  While she chickened out on doing the deal initially, we have decided today to pull the trigger.  We'll be picking up a 2011 ML350 in excellent condition (55K miles) tonight.

We have already received the loan via bank wire from LightStream (a company that we used to finance our last vehicle purchase).  Here are a few of the details:
  • $31,768 Vehicle cost out the door
  • $26,000 loan (2.59%, 72 months)
  • $5,000 trade-in (2006 Honda Accord with 120K miles)
  • $768 down payment
  • $390/month payment
We've been without a car payment for quite some time, so $390/month is going to be a bit of a shock to our systems.  That being said, my wife works incredibly hard and spends most of her day in her vehicle, so it is well deserved.

Opulence, I Has It,  Consumerism,  I Has It Too.

November 23, 2014

Does Shaving My Head Save Money?

I had hair down to my chest during high school and college (picture a surfer, not a heavy metal freak).  Over time, it has been cut shorter and shorter as I grew older and older.  At some point in my 30's, I realized that I would be following my families long standing tradition of going bald.  No problem, I thought, I have a great personality that will make up for the lack of hair.  Lol! 

Now that I am pushing 40 and the thinning is here, I realize that losing your hair sucks.  I've tried hiding it a modern day combover, the a faux hawk, but have been losing the battle.  I don't consider myself vain, but seeing photos of the poor state of my hair made me cringe.  So, I shaved my head last week.  This is not the first time that I have shaved my head, but each time it is a bit of a shock.  Waking up in the morning and walking into the bathroom, I flinch a bit when I look in the mirror and remember what I did.  Plus, my head is so newly shaven right now that my scalp still has that white pasty look.  No good, but I am going to OWN IT and get used to the idea of looking like Kelly Slater or Jason Statham...in my dreams.  Haha!

But, financially, having a shaved head makes some sense.  Hair cuts cost $15-$30/month, styling products, shampoo & conditioner are $25-$50/year.  I think the big win is the time savings.  All I have to do it use the clippers once a week and I'm done.  It must save ~30 minutes a day of washing, conditioning, & styling.  That's 3.5 hours a week that I can use to earn money.

See what I did there?  I took the sad situation of going bald, turned it into something that I controlled (shaving my head), and rationalized it as a way to save money to make myself feel better.  I'm going to go run the clippers again...it's time for a trim.

November 22, 2014

$30K on a New (Used) Car Today

My wife drives a lot for her job and uses our 2006 Honda Accord to get around.  The car is paid off and her company reimburses her $800/month and gives her a gas card.  Needless to say, we've been loving the deal.  Lately, however, my wife has been yearning for a newer vehicle with more room, integrated navigation, Bluetooth, etc.  Things that would make her day a little easier.

With how well my wife has been doing in her job ($200K+ this year in salary, bonuses, and reimbursements), we decided to begin looking to upgrade her vehicle.  Long story short, she found an ML350 that she LOVED tonight, negotiated the deal (including a $1K reduction in price and $5K for trading in the Accord), and worked out financing. 

So, do we have a new (used) SUV...nope.  She chickened out!  Lol!  She said she needed to sleep on the idea of a $417/month car payment when we've gone without car payments for so long.


November 21, 2014

Wife's quarterly bonus $12,490


My wife has been doing absolutely amazing at her job.  She just closed another successful quarter, earning a bonus of $12,490.00 gross ($7,664.17 net).  This brings her 2014 bonus total to $110,280.00!

I am so proud of her well-deserved success.  In addition to her bonuses, she also receives a $97,000/year salary, $800/month auto reimbursement (and gas card), and $100/month internet reimbursement.  I knew she was extremely talented, but this is beyond what I ever could have hoped for.

I am so bless to have a beautiful, smart, and successful wife!

November 1, 2014

October 2014 Income Statement

October was the first month living on just my wife’s income, and we blew the budget.

Our total income in October was $7,392.08. In addition to my wife’s paycheck, she received an $800 auto allowance and a $100 company reimbursement for internet service. We also received $45 credit card reward, $100 from a laptop sale, and $115 from Husband's mom.  We earned $4.95 in interest income from our online savings account.

In October, we spent a total of $9,707.57.  We had a $174 windshield repair, $220.62 for clothing, and $2,170.61 in “household items”.   We will have to work harder in November to get our expenses inline.

Next month, my wife should receive a $12,000 gross quarterly bonus.  Last month, we reduced our nanny’s work schedule to four days per week, saving $320/month.  We have decided to reduce her schedule to three work day per week, beginning November 1st, saving another $320/month.

 
 
 
 
 

October 30, 2014

October 2014 Net Worth Update (-6,226.76)

The first month of me not working was a tough one financially. In October, our net worth decreased $6,226.76, to a total of $286,529.53 (see table below).

What Worked
We saw small gains in our IRA’s, savings, and 529 Plans.

What Didn’t Work
We contribution at total of $242.50 to our retirement accounts, but saw them decrease $566.41. Our 0% credit card balance increased due to purchasing a new HVAC system.

Next Month
November should go a little better because my wife will earn a quarterly bonus of ~$12K gross. We plan to use the proceeds to pay down our 0% credit card debt from the HVAC system.


Assets Sep-14 Oct-14 Change % Change
401(k) Accts       77,552.57       76,840.58          (711.99) -0.93%
Roth IRAs       10,764.61       10,891.89            127.28 1.17%
Traditional IRAs       45,693.65       45,711.95              18.30 0.04%
Taxable Brokerage Accts         1,148.00         1,148.00                    -   0.00%
Cash & Savings Accts         7,720.37         7,814.70              94.33 1.21%
Son's 529 Plan / Upromise       10,445.00       10,576.31            131.31 1.24%
Daughter's 529 Plan / Upromise         3,297.21         3,313.44              16.23 0.49%
Home     489,000.00     489,000.00                    -   0.00%
Car 2         8,697.30         8,610.33            (86.97) -1.01%
Car 3       13,999.23       13,859.24          (139.99) -1.01%
Total Assets     668,317.94     667,766.44          (551.50) -0.08%
Liabilities Sep-14 Oct-14 Change % Change
Credit Card Balances         3,509.80         9,834.11         6,324.31 64.31%
Home Mortgage     372,051.85     371,402.80          (649.05) -0.17%
Car 2 Loan                    -                      -                      -   0.00%
Car 3 Loan                    -                      -                      -   0.00%
Total Liabilities     375,561.65     381,236.91         5,675.26 1.49%
Net Worth     292,756.29     286,529.53       (6,226.76) -2.17%

October 4, 2014

September 2014 Income Statement


September was another very good income month, but we had a few last minute large expenses that blew the budget.
Our total income in September was $13,739.35. In addition to our regular paychecks, I received $2,049.71 PTO payout and last weeks pay.  My wife’s company paid her an $800 auto allowance and a $100 company reimbursement for internet service. We also received $95 from Verizon and a $30 for our daughter’s 529 Plan.  We earned $5.38 in interest income from our online savings account.

In September, we spent a total of $16,789.56!  Not something we expected the month I quit working.  Some of the larger, non-typical expenses include $6,366 for a new HVAC, $500 for a new laptop, and $310 for new brakes and rotors.
 am very interested to see if we can dramatically reduce our expenses in October.  My wife’s  net income each month is $6,300.28 plus an additional $900.00 for auto allowance and internet service.  So, $7,200 or less is the goal.

September 30, 2014

September 2014 Net Worth Update (-4,161.88)

In September, our net worth decreased $4,161.88, to a total of $292,966.29.
 

What Worked
I separated from my company on September 19th, in an effort to find a position that provides a better work/life balance. With my departure, I paid off the $4,757.76 balance of my 401(k) loan.  


What Didn’t Work
We contribution at total of $5,000.26 ($4,757.76 of which was a loan repayment) to our retirement accounts, but saw them decrease $28.54. Our savings account balance decreased due to pulling funds from the 401(k) loan repayment.
 

Next Month
Next month will be the first full month without a dual income for our household. We’ve run the numbers and know that we can make ends meet until I find a job, but October will be telling, to say the least.

September 2, 2014

August 2014 Income Statement

August was an awesome income month and we kept our expenses pretty well in line. (see attached spreadsheet).


Our total income in August was $18,070.88. In addition to my regular paychecks, my wife received $2,610.71 in disability, and a partial $3,006.96 paycheck after returning to work on the 18th. She also received a $13,050 gross ($8,009.69 net) quarterly bonus! My wife’s company paid her an $800 auto allowance and a $100 company reimbursement for internet service. We earned $4.50 in interest income from our online savings account. 


In August, we spent a total of $9,673.69. Some of the other larger, non-typical expenses include $200 new mobile phone for meand a larger than normal electricity bill of $525.25. In addition, our nanny’s weekly pay went from $300/week to $400/week as she began watching both of our children when my wife completed maternity leave. Our son also started preschool ($397/month).


September will be our last month with two incomes until I find a new job. I trust God has a great now position for me.

August 30, 2014

Already Passed our 2015 Net Worth Goal!

We passed our 2015 net worth goal of $296,000. Our net worth is currently $297,643.30 (I will be updating the chart to the left at the end of September).

This puts us over a year ahead of our planned goals:
2014 goal $241,900
2015 goal $296,000

It's time now to start making some headway on our 2016 net worth goal of $343,700! Feeling blessed!

August 28, 2014

August 2014 Net Worth Update (+12,455.81)

In August, our net worth increased a whopping $12,455.81, to a total of $297,128.17.

What Worked
My wife earned a $13,050.00 gross ($8,009.69 net) quarterly bonus. She is doing amazing in her career and it has been a huge blessing our family. With proceeds from the bonus, we significantly increased our savings account balance. We contribution at total of $1,210.38 to our retirement accounts and saw them increase $4,532.01.

What Didn’t Work
For the next few months, we will be making steady, but slow progress paying down our 0% credit card (current balance $3,474.85). Our taxable brokerage account continues to wallowing.

Next Month
I will be leaving my company on September 19th, hoping to find a new job that provides a better work/life balance. In the meantime, things will be a little tighter as we live on my wife’s income. Before departing my company, we will be paying off the remainder of the 401(k) loan (~$4,800) that we took out for our home down payment.

August 4, 2014

July 2014 Income Statement

July was a bit lower than normal income month (wife on disability), and our expenses were more than we brought.

Our total income in July was $8,745.67. In addition to my regular paychecks, my wife received $4,300.00 in SDI (disability). My wife’s company paid her an $800 auto allowance and a $100 company reimbursement for internet service. We earned $3.25 in interest income from our online savings account.

In July, we spent a total of $9,301.83. Some of the other larger, non-typical expenses include $600 vasectomy, $170 auto registration, and a larger than normal electricity bill of $496.55.

August will likely be a larger income month with my wife going back to work at the end of the month. She should also receive a quarterly bonus in August.


August 1, 2014

July 2014 Net Worth Update (-3,801.50)

In July, our net worth decreased $3,801.350, to a total of $284,672.36.

What Worked
Our daughter’s new 529 Plan had a $5.61 increase over last month

What Didn’t Work
We passed a net worth milestone of $290,000 in June, but dropped back well below $290K and have not yet recovered. We also added another hospital bill to the 0% credit card. We contribution at total of $818.88 (low because my wife is currently on disability) to our retirement accounts and saw them decrease $2,216.94. 

Next Month
September 19th will be my last month working at my current company. I have decided to take a break (hopefully short) to spend time with my family and then begin looking for a new job. So, we’ll try to get more money tucked away into savings in August to help get us through my period of unemployment.

July 3, 2014

June 2014 Income Statement

June was another great income month, but also a higher than normal expense month (see attached spreadsheet).

Our total income in June was $10,004.15 (my wife is on disability spending time with baby). In addition to my regular paychecks, my wife received $4,914.29 in SDI (disability). She also received $360 due to a mistake on her last paycheck and $284.43 in extra disability from her company (above and beyond state disability). My wife’s company paid her an $800 auto allowance and a $100 company reimbursement for internet service. We earned $3.01 in interest income from our online savings account.

In June, we spent a total of $14,283.65. Some of the other larger, non-typical expenses include $5,560.54 for our portion of the c-section birth of our daughter and $245.32 in gifts.

July will likely be a low income month with my wife on disability.









July 1, 2014

June 2014 Net Worth Update (+6,677.26)

In June, our net worth increased $6,677.26, to a total of $288,473.86 (click on spreadsheet below).

What Worked
We contribution at total of $818.88 (low because my wife is currently on disability) to our retirement accounts and saw them increase $4,895.26. We also contributed $3100 to our daughter’s 529 Plan.

What Didn’t Work
We passed a net worth milestone of $290,000 in June, but backslide a little after placing $2,276.09 in charges from our daughter’s birth onto a 0% credit card. We also dipped into our savings a bit to cover a portion of the money used to open a 529 Plan for our daughter. 

Next Month
July may be a low income month (wife on disability) and, as a result, a low net worth increase month. 

June 28, 2014

Net Worth Milestone: $290,000

We passed the net worth milestone of $290,000. We passed our last net worth milestone of $280,000 in May (last month).

Our net worth is currently $290,155. I will update our chart on the left at the end of the month.

We should hit our next net worth milestone of $300,000 by October.

June 3, 2014

May 2014 Income Statement

May was another great income month and a higher than normal expense month (see attached spreadsheet).

Our total income in May was $17,802.05. In addition to our regular paychecks, my wife earned a $13,140.00 gross ($7,080.03 net) quarterly bonus and received annual wellness check $1,000.00 gross ($985.45 net).  She also received an $800 auto allowance and a $100 company reimbursement for internet service.  We sold a video game system for $100 and earned $2.77 in interest income from our online savings account.

In May, we spent a total of $10,680.52.  Some of the other larger, non-typical expenses include $1,695 cord blood banking for daughter and $400 for tax on old bonus credit card.

June will be interesting.  My wife had our baby at the end of May and will be on disability for 3 months.  The weekly disability checks should be ~$1,075.  As a result, we’ll have to limit our spending a bit.


June 1, 2014

May 2014 Net Worth Update (+6,563.66)


In May, our net worth increased $6,563.66 to a total of $281,796.60 (click on spreadsheet below).
 
What Worked
Our second child was born this month!  She is a happy and healthy little girl.  We feel so blessed!  In addition to popping out a baby, my wife received a $13,140.00 gross ($7,080.03 net) quarterly bonus!  We contribution at total of $1,016.16 to our retirement accounts and saw them increase $3,813.59.  We also contributed $150 to our son’s 529 Plan and bolstered our savings a bit.

What Didn’t Work
Our taxable brokerage accounts dipped down a bit.

Next Month
My wife will be on disability for 3 months to spend time with our baby.  Disability pays ~$1,075/week, so we will need to reduce our expenses.